In most countries, there is legislation to ensure a fair distribution of work and rate of pay. The legislation can cover the following:
a) Number of hours worked in a week
b) Minimum wage
Take a country with a work week of (say) 40 hours and a real unemployment rate that is close to 10 percent. The official unemployment rate is usually lower, as many unemployed people are not captured in the statistics.
The unemployment rate can be reduced by legislating a work week of 36 hours. This will require employers to employ 10% more workers and give work opportunity to the unemployed workers.
To keep business cost at a competitive level, the wages of employed people working 36 hours a week should be 10% lower than before (when they work 40 hours a week).
It is difficult to cut the monthly salary of workers. But, if they are on an hourly rate, the adjustment is automatic. To create a flexible work environment, we need to change to hourly rate of pay.
Some employers will find it necessary to get their employees to work longer than the legislated work week. This can be allowed, but the employer should be required to pay a tax on the wages paid for the additional hours. This will give the incentive for the employer to employ other people, rather than ask the existing employees to work longer hours.
If the opportunity to work is fairly distributed to more people, we will have a better society. Most people can find work and get a wage that is sufficient to meet their cost of living. They will have more free time, due to the shorter work week. The free time can be converted into leisure activities and hobbies, and create opportunities for other supporting businesses to be developed. Some people can use their leisure time to do part time work and earn a supplementary income. This will create higher economic growth and a better quality of life.
Tan Kin Lian
Saturday, September 26, 2009
Rate of pay
We are used to thinking of monthly salary. This is a legacy of the old world, where most people expect to work full time (i.e. 8 hours a day) and for a lifetime career.
In today's environment, we should think about flexible work. It is more appropriate to think about an hourly rate. This allows people to work on certain days (and for varying hours in a day (according to their personal schedule). It is especially suitable for students or adults pursuing further study.
The place of work can also be made flexible. Many people now find it convenient to work from their home. The hourly rate of pay can be converted into a project for a fixed payment. The time taken to complete a project can be estimated, and the hourly rate of pay can be applied to get the project fee.
I am creating a new job portal, and have decided to use the hourly rate as the basis of searching for a job. I use a conversion rate of 160 for hourly rate to monthly salary. For example, an hourly rate of $10 is the same as a monthly salary of $1,600.
In today's environment, we should think about flexible work. It is more appropriate to think about an hourly rate. This allows people to work on certain days (and for varying hours in a day (according to their personal schedule). It is especially suitable for students or adults pursuing further study.
The place of work can also be made flexible. Many people now find it convenient to work from their home. The hourly rate of pay can be converted into a project for a fixed payment. The time taken to complete a project can be estimated, and the hourly rate of pay can be applied to get the project fee.
I am creating a new job portal, and have decided to use the hourly rate as the basis of searching for a job. I use a conversion rate of 160 for hourly rate to monthly salary. For example, an hourly rate of $10 is the same as a monthly salary of $1,600.
FISCA Assistance to consumers
If you need assistance from a FISCA volunteer on a financial product, you can register with www.fisca.sg. The scope of the assistance is set out in this document.
Free market (5) - Cooperation, not competition
We are used to a competitive environment. All suppliers compete hard against each other to get business and expand their market share. Sometimes, the competition is so intense that they try to put their competitors out of business.
It is possible to work in a cooperative environment. Each business serves different groups of customers. They may charge the same price for the service, or it may be differentiated to some extent. Some customers do not mind paying a higher price to get better service or to be served more quickly.
In a market place, there can be several stalls selling similar products. In many places, the stall holders cooperate with each other. If one stall is not able to provide the goods needed by a customer, they will get the goods from a nearby stall and sell it to the customer. Maybe, the two stalls will share the profit margin. This is cooperation.
If we extend the concept of cooperation to neighboring countries, we will get more goodwill and friendship between the people of the countries, as they will benefit together. If one country feels that another country is taking a larger share of the profit, there will be dislike and distrust.
Under a cooperative environment, all parties will survive and progress together. Any opportunity is shared fairly among all the parties. It creates goodwill and friendship. Even if some business fail, they will not blame it on their competitors but on their inability to attract the customers.
We need the educate people on the principles for a cooperative environment.
Tan Kin Lian
It is possible to work in a cooperative environment. Each business serves different groups of customers. They may charge the same price for the service, or it may be differentiated to some extent. Some customers do not mind paying a higher price to get better service or to be served more quickly.
In a market place, there can be several stalls selling similar products. In many places, the stall holders cooperate with each other. If one stall is not able to provide the goods needed by a customer, they will get the goods from a nearby stall and sell it to the customer. Maybe, the two stalls will share the profit margin. This is cooperation.
If we extend the concept of cooperation to neighboring countries, we will get more goodwill and friendship between the people of the countries, as they will benefit together. If one country feels that another country is taking a larger share of the profit, there will be dislike and distrust.
Under a cooperative environment, all parties will survive and progress together. Any opportunity is shared fairly among all the parties. It creates goodwill and friendship. Even if some business fail, they will not blame it on their competitors but on their inability to attract the customers.
We need the educate people on the principles for a cooperative environment.
Tan Kin Lian
Friday, September 25, 2009
RED Portal (Real Estate Data)
I invite you to visit this property website,
www.easysearch.sg (Real Estate Data)
It contains useful information for buyers,seller and tenants of condominium properties.
Read the Guide for information on how to use the website.
Please give your feedback on this website in this survey.
Misleading ad for single premium policy
COMMENT POSTED IN MY BLOG (Edited by me)
I just picked up a brochure with big words Single Premium Policy, from a certain company in Ang Mo Kio Hub. I was shocked.
This company has taken advantage of the generally positive sentiment about simple single insurance products. It emphasized in its brochure, an unguaranteed payout of "4.1% p.a." - but if you read the fine print, you "may" get the 4.1% only if you put the money for a total of 30 years.
The brochure cites an example: if you put 65,700 when you are 35 years old (duh.. which 35 year old has so much spare cash), then after 10 years you get a guaranteed return of $76,900. I calculated that this is a miserable return of 1.5% p.a. (the company didnt do this calculation for you. They prefer to mislead and emphasize heavily the non guaranteed figure of 4.1%). I think that 1.5% guarantee is a bit too low for a 10 year simple SPP.
The brochure explained that "up to 4.1% return" can be obtained! But to get the 4.1%, the first 10 year end non guaranteed bonus must firstly be realised (which may not happen), AND secondly, you must let the policy roll on another 20 years, and you get the money back in drips and draps over 20 years. Do note: a lump sum payback is prohibited. You have to put most of the Single premium in that company for 30 years to get 4.1% pa. Who in his right mind would part with $65,700 for 30 years in any company.
I think that companies should not use non-guaranteed figures as a carrot to hook the customers. This is not fair to the consumer! When drawing up illustration, they should use realistic figures.
I have bought SPPs many times before, but the issuers don't normally advertise the non-guaranteed return. In my view, a simple 5 year SPP is acceptable, not the complicated products that give a bad name to the industry.
REX
I just picked up a brochure with big words Single Premium Policy, from a certain company in Ang Mo Kio Hub. I was shocked.
This company has taken advantage of the generally positive sentiment about simple single insurance products. It emphasized in its brochure, an unguaranteed payout of "4.1% p.a." - but if you read the fine print, you "may" get the 4.1% only if you put the money for a total of 30 years.
The brochure cites an example: if you put 65,700 when you are 35 years old (duh.. which 35 year old has so much spare cash), then after 10 years you get a guaranteed return of $76,900. I calculated that this is a miserable return of 1.5% p.a. (the company didnt do this calculation for you. They prefer to mislead and emphasize heavily the non guaranteed figure of 4.1%). I think that 1.5% guarantee is a bit too low for a 10 year simple SPP.
The brochure explained that "up to 4.1% return" can be obtained! But to get the 4.1%, the first 10 year end non guaranteed bonus must firstly be realised (which may not happen), AND secondly, you must let the policy roll on another 20 years, and you get the money back in drips and draps over 20 years. Do note: a lump sum payback is prohibited. You have to put most of the Single premium in that company for 30 years to get 4.1% pa. Who in his right mind would part with $65,700 for 30 years in any company.
I think that companies should not use non-guaranteed figures as a carrot to hook the customers. This is not fair to the consumer! When drawing up illustration, they should use realistic figures.
I have bought SPPs many times before, but the issuers don't normally advertise the non-guaranteed return. In my view, a simple 5 year SPP is acceptable, not the complicated products that give a bad name to the industry.
REX
Free market (4) Access to information
For a market to work fairly, the buyers and sellers must have access to relevant and reliable information. If one party has more information than another party, the first party will have an advantage. In some cases, this advantage is acceptable, but in other cases, it would be considered as unfair.
In the stock market, it would be unfair for the people with insider information to be allowed to trade with other people without the same information. Regulations are made to prevent insider trading. Those who break the regulations could be prosecuted as a criminal offence.
In property transactions, the price agreed between the buyer and seller depends on the access to information about the property. Usually, the seller has more information about the property, such as the condition of the property and the existence of any legal liability. It is the duty of the seller to disclose the information to the buyer.
Both parties should also have access to information about the price of recent transactions of similar properties. This allows them to make the reliable assessment of the current market price, so that the agreed price is fair to both parties. If one party has more information, that party will be able to trade at an advantage over the other party.
Sometimes, the party with the information can withhold or mis-represent the information to the other party to get a better price. That is unfair and is taking advantage of the other party.
Where information is not available, the customer may have to rely on the advice of the property agents, who are expected to be more familiar with the market. Unethical agents may take advantage of their customers and give unreliable or dishonest advice. Some may have a conflict of interest, and fail in their duty of giving the best advice to their client.
To prevent unfair trading and unethical conduct of agents, it is best that information should be made easily available to all. For example, for property transactions, it is best for the prices of recent transactions involving similar properties should be made accessible to all parties in a convenient and clear way.
For trading in stocks, the buy and sell prices and recent transactions should be available to all parties to make their price decision.
When a client relies on the advice of a professional, such as a doctor or lawyer, there has to be a code of ethics for the professional to look after the interest of the client, rather than to apply their expert knowledge to take advantage of the client and over-charge for the professional service or to make a hidden profit on a transaction.
In the stock market, it would be unfair for the people with insider information to be allowed to trade with other people without the same information. Regulations are made to prevent insider trading. Those who break the regulations could be prosecuted as a criminal offence.
In property transactions, the price agreed between the buyer and seller depends on the access to information about the property. Usually, the seller has more information about the property, such as the condition of the property and the existence of any legal liability. It is the duty of the seller to disclose the information to the buyer.
Both parties should also have access to information about the price of recent transactions of similar properties. This allows them to make the reliable assessment of the current market price, so that the agreed price is fair to both parties. If one party has more information, that party will be able to trade at an advantage over the other party.
Sometimes, the party with the information can withhold or mis-represent the information to the other party to get a better price. That is unfair and is taking advantage of the other party.
Where information is not available, the customer may have to rely on the advice of the property agents, who are expected to be more familiar with the market. Unethical agents may take advantage of their customers and give unreliable or dishonest advice. Some may have a conflict of interest, and fail in their duty of giving the best advice to their client.
To prevent unfair trading and unethical conduct of agents, it is best that information should be made easily available to all. For example, for property transactions, it is best for the prices of recent transactions involving similar properties should be made accessible to all parties in a convenient and clear way.
For trading in stocks, the buy and sell prices and recent transactions should be available to all parties to make their price decision.
When a client relies on the advice of a professional, such as a doctor or lawyer, there has to be a code of ethics for the professional to look after the interest of the client, rather than to apply their expert knowledge to take advantage of the client and over-charge for the professional service or to make a hidden profit on a transaction.
It is important for consumers to have access to independent advice, where there is the possibility that the professional may have a conflict of interest.
Tan Kin Lian
Tan Kin Lian
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